CSA Staff Notice 55-317 Automatic Securities Disposition Plans
Part 4 Guidance on Disclosure of ASDPs

Disclosure about Automatic Plans in News Release and Insider Reports*

Disclosure regarding the ASDP

In order to enhance transparency of trading by insiders in the market, we recommend that the issuer or the insider disclose relevant information regarding the ASDP by way of a news release filed on SEDAR.

Specifically, we recommend that the issuer or the insider publicly disclose the establishment of the plan and the plan’s principal terms and conditions, such as the parties to the plan, its term, the waiting period before the trades can start under the plan and the restrictions on the ability of the insider to amend, suspend or terminate the plan. Such disclosure would also benefit issuers as it would help them manage market perception of the sale of securities by insiders.

In addition, we recommend that the news release indicate the number of securities to be sold under the ASDP and the minimum price at which these securities can be sold, if such a minimum price is specified in the trading parameters provided in the ASDP. This disclosure could provide valuable information for the market as to the insider’s views of the issuer’s prospects.

As already discussed in this notice, we also recommend that the market be made aware by way of a news release of any special circumstances occurring in connection with the plan, such as its amendment, suspension or termination.

Disclosure in insider reports

When filing insider reports, we recommend that an insider specify in the comment section that the trades were made under an ASDP.

This disclosure would enable the market to understand that the information provided under each subsequent report does not reflect discrete investment decisions made by the insider but is instead related to a previously announced ASDP. We also remind insiders that the transfer of an insider’s securities to the dealer or plan administrator for the purpose of an ASDP is a transfer that should be reported in accordance with section 3.3 of NI 55-104, which requires an insider to file a report disclosing all transfers of control over the securities they hold in the issuer.

*This title is provided by Lexata; it is not part of the notice.